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Please Help: Gift of property situated ouside india by NRI to Person Resident In India (FEMA Compliance only)

Posted Date : 07-Jan-2016 , 05:31:59 pm | Posted By: SHIVAM PODDAR

Category : FEMA | Answers : 0| Comments : 1| Hits: 143

Situation : A person is NRI holding property outside india (Dubai) ,when he aquire such property he is also NRI that time. Now he wants to gift his property to person resident of India. CAPITAL ACCOUNT TRANSACTION UNDER FEMA : 1- As defined in Section 2(e)​ of the FEMA, "capital account transaction" means transactions which alters the assets or liabilities, including contingent liabilities outside India, of persons resident in India or assets or liabilities, in India, of persons resident outside India and includes transactions referred to in section 6(3)​ of the FEMA. Transactions covered in section 6(3) of FEMA are as follows: - * Transfer of immovable property outside India, other than a lease not exceeding five years by a person resident in India. Conclusion : 1- Since in our transaction there is alteration of assets situated outside india of a person resident outside india, hence no capital, account transaction. 2- Modes of acquiring property outside India by a resident 3.1 According to section 6(4) of the FEMA, a person resident in India can hold, own, transfer or invest in any immovable property situated outside India if such property was acquired, held or owned by him/ her when he/ she was resident outside India or inherited from a person resident outside India. "3.2 A resident can acquire immovable property outside India by way of gift or inheritance from: (a) a person referred to at 3.1 above; or (b) a person resident in India who had acquired such property on or before July 8, 1947 and continued to be held by him with the permission of the Reserve Bank." Conclusion : 1- Since in our transaction owner of property is Person resident outside india but as per para 3.1 says about person resident in India. 2- Since in our transaction giftee is person resident of india but para 3.1 does not provide case of gift in case of resident it only provide Inheritance case. 3- FEMA basically talks about either Property situated outside india of Person resident in india or Property situated in india of person Resident outside india.Hence our situation is not falling in both criteria and it is permisible transaction. 4- Relation between Sister Husband and sister in law is not specified under FEMA .

Comments
Posted By : Gaurav Navedia 23-Dec-2017, 08:43:48
It is assumed the person transferring property is still NRI. You are right it is a permissible transaction. The resident can accept transfer. There is restriction when there is reverse case i.e. transfer from resident to non resident. In your case it is permissible without RBI permission.
 

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